Tim Price on bond investors trying to front-run central bank purchases

As a direct consequence of the central bank manipulation of asset prices, today’s markets give the impression of risklessness, irrespective of price.  Why not buy conspicuously overpriced bonds if you know there is a greater fool out there, in the form of a central banker willing to pay even more for those bonds than you did?  After all, the central bank can print money out of thin air to make those purchases.  This must end badly: major financial accidents are typically born out of a misconception of risks, rather than returns.

~ Tim Price, "Regime Change is Coming," Price Value Partners, April 1, 2023

Michael Weeks and Dominik Schönenberger the financial industry and moral decay

Modern man, enthralled by the contrivance of credit growth and the resulting asset price inflation and unconstrained by the notion of scarcity in economic goods, sees the act of investing merely as that of buying something so as to sell later, hopefully at a profit.  As a consequence, in the pursuit of such elusive profit, we witness the rise of a financial industry replete with every form of artifice which, while ostensibly seeking to give us advice, tends to ultimately impoverish us, not merely in terms of money, but, to a greater extent, through the decay of our innate instinct about what is right and wrong.

~ Michael Weeks and Dominik Schönenberger, "In defence of financial anachronism," Edelweiss Journal, May 24, 2018

(Weeks and Schönenberger are protégés of Tony Deden, founder of Edelweiss Holdings.)

Rob Arnott on the Greater Fool Theory

People buying bubble assets will make money until they don't.  If they don't have a view of what will it take for me to say, "OK, enough already, I'm going to get out," then they are doomed to ride the roller coaster over the top and down.  So without a sell discipline, buying bubble assets is insanely stupid.

~ Rob Arnott, Research Affiliates co-founder, Bloomberg's What Goes Up podcast, July 27, 2020

Sovereign wealth funds play bubbles

It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose.

~ Lou Jiwei, Chairman China’s sovereign wealth fund, China Investment Corporation, "Wealth Fund Muscles Up as Markets Recover," Reuters, August 28, 2009

Jim Cramer: Buy stocks and "accept that they're overvalued"

You should be buying things and accept that they're overvalued, but accept that they're going to keep going higher. I know that sounds irresponsible, but that's how you make the money. Right now up is down, left is right, peace is war, all that 1984 stuff. But don't laugh, 'cause this could very well mean the difference between closing out the year on a high note and getting crushed. All these things are driving the pros batty and making tons for amateurs, and it's not over yet.

So what should you do now? Stop trying to out think it. Stop trying to be smarter than the market. Forget what you used to know; it's not working right now. The bottom line: you have to recognize, like we do in Cramerica, that there are bull markets - oil, tech, alternative energy, fertilzer, ag. You gotta play 'em. So go buy some Transocean, go buy some Deere, go buy some Baidu. Just go do it - it's ok. Go buy some Google. Buy a little. Stop worrying that everything's too expensive at the moment. Welcome the rate cut, take a little off after it goes up, and thank me later.

~ Jim Cramer, CNBC's "Mad Money," October 31, 2007

(This was taken from "Jim Cramer Flips, Flops, and Gloats," DonHarrold.net, November 18, 2007.)

(On October 31, 2007 the DJIA was +138 to 13,930. RIG closed at 119.37, DE at 77.45 (after 2-for-1 split), BIDU at 382.49, and GOOG at 707.00.)